8 Reasons Why Outsourcing Performance Measurement Is A Bad Idea

I'm putting my
creating efficient government
series on hold for a week to tell you about a recent conversation with a colleague, on the topic of outsourcing performance measurement.

Now by 'outsourcing performance measurement' I don't mean just getting some outside consulting help or training (which I heartily approve of ;-) but actually turning the whole process over to 'someone else' to manage and implement; i.e. it's the difference between delegate and abdicate.

Control : How can I ensure that my subordinates are doing the right thing?

Budget: On what programs, people, or projects should my agency spend the public’s money?

Motivate: How can I motivate line staff, middle managers, nonprofit and for-profit collaborators, stakeholders, and citizens to do the things necessary to improve performance?

Promote: How can I convince political superiors, legislators, stakeholders, journalists, and citizens that my agency is doing a good job?

Celebrate: What accomplishments are worthy of the important organizational ritual of celebrating success?

Learn: The 'why' of what's working or not working?

Improve: What exactly should who do differently to improve performance?

I might argue there is some overlap in this list, but it's a pretty good description of what performance measurement is supposed to do. So taking them one by one, how well would outsourcing performance measurement work for each of these purposes?

Evaluate. As dozens of public sector performance measurement projects have proved to us, REAL analysis and attribution of results requires in-depth understanding of the work producing the data i.e. by the folks on the coal face. Of course, there also needs to be some 'big-picture' analysis, but you absolutely need that first-level review. No outsider can do this.

Control. Who determines what the 'right things' are for your subordinates to work on? If you hand over control of this by outsourcing performance measurement, you may as well hand over planning, too; the processes are (or should be) linked.

Budget. The manager supposes that if the work unit consumes the budgeted resources in planned activities, the things (goods, services, information, policies, etc) produced will lead to desirable results for the work unit, and the larger organization. If you let someone else decide what your desirable results are - i.e. how you measure success - you may not be happy with their choices.

Motivate. One of the problems with outcomes, measures and targets imposed by outsiders is, it's really easy to motivate the wrong behaviour. This results in 'gaming' the system to produce the illusion of success by meeting spurious targets. “If I never answer my phone, I can meet my target of 'zero complaints recorded”.

Promote. No one cares as much about the success of your organization as you do; therefore no one should care more about how that success is portrayed. Performance measurement has to be about telling the story of your work unit’s success in meeting defined objectives. To create a credible performance story, you the intelligent manager needs to understand, explain and defend how your work unit contributes to the bigger picture in the organization. By outsourcing performance measurement you skip the learning curve necessary to create your story.

Celebrate. When I was a manager in the public service, I had a finely-tuned BS-detector (surprisingly, only about 97.3% of other employees had the same faculty). The public service has a fine tradition of launching initiatives with great fan-fare, that subsequently slide into disarray and disappointment, and ultimately sink from view.

Rather than acknowledging the problem (and perhaps LEARNING something from it), the usual senior-management response is to declare the moribund project a success and move on. You know, and your staff knows, when a 'success' is really a success or is just a PR exercise. If you own performance measurement, you know what actual success is, for realz.

Learn. This is a biggie, follow the logic here: if you don’t measure results, you can’t tell success from failure. If you can’t recognize failure, you can’t correct it. If you can’t see success, you can’t learn from it.

Much of the organizational learning I have observed during performance measurement project occurred during the development of objectives, outcomes and measures; i.e before the thing was implemented.

That's because 1 - people had to think about how their organisation REALLY worked; and 2 – they gained some insight into how other parts of the organization affected their work, and how they affected others. Outsourcing performance measurement is to lose out on much of this learning.

Improve. This is one of the 'overlap' cases I mentioned at the beginning; in reality everything listed above is about improving the organisation. No one, really, can do it TO you, or FOR you. You and your team need to be intimately involved in measuring and improving performance, on your terms.

Let me finish this up by telling you an experience from my first couple years as an independent consultant. I was lucky enough to work for a director (Industry Canada) who really understood what outside consultants should and should not do.

He taught me a lot about what a good consultant does. We should bring skills, perspective, tools and experience to the organization. But number one on the 'should nots' was, 'should not do the manager's job'. And all the above list of 8 are 'manager's jobs'.

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